Tourist accommodation had previously been exempt from VAT.

The decree dated Oct. 8 also allows local authorities in designated housing pressure zones to raise property taxes on homes used for tourist rentals, according to Mallorca news site.

The annual property tax, known as IBI, can be increased by 50% for properties rented to tourists.

The surcharge can rise to 100% for owners with two or more tourist rental properties and 150% for those with at least four, according to Olive News Press Spain.

The measures come as concerns over housing affordability intensify across Spain, where tourism has become a key pillar of the economy.

Spain’s housing crisis has become a major social issue, fueled by tourism pressures, the proliferation of short-term rentals and a shortage of housing supply.

According to the Spanish government, tourist accommodation accounts for 10% of the country’s rental market.

The country has been looking for ways to restrict the number of homes rented to tourists following a post-pandemic boom in visitors, amid protests by residents who blame overtourism for a spike in rental or home purchase prices.

Spain received 12.3 million foreign tourists in August, up 9.2% from a year earlier and the highest total recorded for the month. The increase followed growth of 2.8% in June, when arrivals reached 9.74 million, and 4.6% in July, when 11.53 million visitors arrived.

For the first eight months, Spain received 70.4 million tourists and is on track of welcoming 100 million tourists this year after receiving a record 97 million visitors in 2025.